Accounting for Regulatory Reform Under Executive Order 13771

November 7, 2019

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Executive Order (EO) 13771, known as the “regulatory two-for-one” EO, imposed new constraints on executive branch regulatory agencies, directing them to: (1) to cut two existing rules for each new rule issued and (2) offset any costs imposed by new rules while operating under a regulatory cost cap. The Office of Information and Regulatory Affairs (OIRA), part of the Office of Management and Budget (OMB), is responsible for implementing this EO and reporting on its progress. OMB has issued Regulatory Reform Reports for fiscal year (FY) 2017 and FY 2018. The fiscal year for 2019 ended recently on September 30, 2019. While we await the latest report, this article explains OMB’s current accounting methodology, gleaned from OMB’s guidance and other public documents, and highlights challenges of reporting agency performance in implementing EO 13771. It also contains our recommendations to improve the accuracy and accountability of both OMB’s annual reporting and individual agency actions.

Our article proceeds as follows. Part I details the OIRA guidance to agencies on what “counts” as an EO 13771 regulatory or deregulatory action. Part II describes OIRA’s accounting methodology for estimating agency cost savings. Part III elaborates on analytical concerns that flow from the administration’s current approach for estimating “counts” and “cost savings” and offers several recommendations for improving the content of agency actions and OIRA’s annual reporting on EO 13771.

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